Purpose

• To increase special education cross subsidy aid by changing how the aid is calculated and scheduled over several fiscal years.

Main Provisions

• The bill amends Minnesota Statutes 2024 section 125A.76 subdivision 2e (the cross subsidy provision).
• It defines cross subsidy reduction aid as: the school district’s initial special education cross subsidy for the previous fiscal year multiplied by the cross subsidy aid factor for that fiscal year.
• It establishes a schedule for the cross subsidy aid factor:
  • 6.43 percent for fiscal year 2023
  • 44 percent for fiscal years 2024 and 2025
  • 50 percent for fiscal year 2026
  • 50 to 54 percent for fiscal year 2027 and later
• In short, the bill increases the portion of the initial cross subsidy that is provided as aid to districts over time.

Significant Changes to Existing Law

• Alters the calculation method for cross subsidy reduction aid by tying it to a new cross subsidy aid factor and to the district’s previous year cross subsidy.
• Establishes explicit percentage steps (percentages by fiscal year) that determine how much aid is provided, effectively increasing the aid in future years compared to earlier years.

Relevant to discussions of how Minnesota funds special education, this bill changes the timing and amount of cross subsidy aid districts receive.

Relevant Terms - cross subsidy reduction aid - cross subsidy aid factor - initial special education cross subsidy - previous fiscal year - fiscal year 2023 - fiscal years 2024 and 2025 - fiscal year 2026 - fiscal year 2027 and later - Minnesota Statutes 2024 section 125A.76 subdivision 2e - special education cross subsidy - education finance